Health Care (Governance) (No 2) Amendment Bill

Second Reading

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (12:11): I move:

That this bill be now read a second time.

Today, I rise to introduce the Health Care (Governance) (No 2) Amendment Bill 2019 into parliament. In July last year, the parliament considered amendments to the Health Care Act 2008 to establish governing boards for the local health networks. These governing boards will be responsible for the delivery of local health services within their geographic areas. Governing boards will consult with local service providers and the community to ensure that the services provided are reflective of local needs and priorities and are able to be provided within the resources available.

Governing boards will be required to operate within a clinical governance framework to ensure that these services are safe, high quality and accessible. The governing boards will also be responsible for the oversight of local health network budgets. The governing boards will appoint their chief executive officers, who will be responsible for managing the operations and affairs of the local health network services and will be accountable to and subject to the direction of the governing boards. I seek leave to insert the remainder of the second reading explanation in Hansard without my reading it.

Leave granted.

The governing board will be accountable to the Minister for Health and Wellbeing for the oversight of the delivery of health services in accordance with a service agreement negotiated between the local health network and the Department for Health and Wellbeing. The governing boards will also be required to comply with any policy frameworks issued by the department and any directions given by the Minister for Health and Wellbeing.

The governing boards, through the annual report for the local health network will demonstrate their progress against the key performance indicators outlined in the service agreement and what measures they have instituted for to ensure the engagement of communities and health professionals in service delivery.

This earlier bill was the first stage of the government delivering on its election commitment to devolve decision making in the public health system to the local level. This will ensure that decisions are made as close as possible to the area and people affected, and with the full and effective involvement of local health professionals.

Following the passage of the Bill, chairpersons for the ten governing boards were appointed. Members for the transitional governing boards were appointed on 28 March 2019, resulting in a high calibre of individuals to assume responsibility for the oversight of the local health networks from 1 July 2019.

Since their appointment the board chairpersons have been working with the Department for Health and Wellbeing on the governance and accountability framework for the public health system, resulting in the bill before Parliament today.

This bill amends the Health Care Act 2008 to:

revise the functions of the Chief Executive of the Department for Health and Wellbeing

include provisions for service agreements between the Chief Executive of the Department for Health and Wellbeing and the Local Health Networks and the SA Ambulance Service

make provisions for the annual reporting and transfer of assets for the metropolitan governing councils that will be dissolved on 1 July 2019, and

make minor amendments to sections of the Act to reflect the new governance and accountability framework for the public health system or clarify their intent.

I will now address the key amendments outlined in the bill. For those minor amendments will I outline the policy intent for the benefit of members in Committee.

The Chief Executive of the Department for Health and Wellbeing is currently responsible for the administration of the public health system. The public health system is too large and complex for all authority and accountability to rest on one person to manage an expenditure budget of more than $6 billion, approximately 32,100 full-time equivalents and around 77 hospitals and health services across the State. But this is the situation since the former Labor government abolished hospital boards in 2008.

With the governing boards now being responsible for the oversight of local health services in their geographic area the role of the Chief Executive of the Department for Health and Wellbeing will change to focus on the strategic direction and performance of the public health system. This is outlined in the new functions proposed for the Chief Executive of the department as the system manager of the public health system.

Inherent in this role is the ability of the Chief Executive to enter into service agreements with the Local Health Networks that will outline performance measures and operational targets for the provision of health services. The Chief Executive will be able to take remedial action or issue directions where these measures or targets are not met.

The ability of the Chief Executive to issue statewide service plans will also contribute to the governance of the public health system and serve as a means of achieving integration and coordination across the system.

The amendments proposed to the role of the Chief Executive will ensure that their role, and that of the governing board and the Chief Executive Officer of the Local Health Network, is clear to avoid duplication or omission.

The bill formalises the service agreements between the Chief Executive of the Department for Health and Wellbeing and the Local Health Networks. Service agreements have been in place through administrative arrangements for a number of years. However, as the governing boards will now be required to manage the performance of their Local Health Network against the performance measures in the service agreement it is proposed to formalise these arrangements. The service level agreements will be made available to the public providing transparency in how the local health network will be funded and managed. This will bring South Australia in line with other jurisdictions.

The governing boards will be accountable to the minister for monitoring the performance of their LHN. The boards also have legislative obligations to develop and publish both clinician and consumer and community engagement strategies. Requirements for the development of these strategies include consultation and anything prescribed by regulation. It is anticipated that the effectiveness of these strategies will be subject to scrutiny from the local communities invested in their development and at each new level of governance within the public health system.

The role of the department will also change under the new governance arrangements. This will be done via a robust and transparent performance framework through the service agreements. The Chief Executive will no longer have direct accountability and responsibility for the overall management, administration, and provision of public health services. The Chief Executive will instead play a role in monitoring the performance of those who are accountable for the delivery of services. The Chief Executive's functions will include overseeing, monitoring and promoting improvements in the safety and quality of health services; monitoring performance; and receiving and evaluating performance and other data in relation to the whole of the public health system.

The bill proposes to dissolve the metropolitan governing councils (which were set up as Health Advisory Councils under the Health Care Act 2008) that were created for each of the metropolitan LHNs. These councils previously acted in an advisory role for the LHN and their role will subsumed within the role of the governing boards from 1 July 2019.

There will be no change to any other Health Advisory Council established under the Health Care Act 2008.

The bill is the fulfilment of a clear commitment of the Marshall Liberal government to decentralise the public health system. Establishing governing boards provides the opportunity to establish local accountability, responsibility and decision making for local health services closer to where they are delivered. This will achieve better health decisions tailored to local needs and deliver a safe, high quality and financially sustainable health system into the future.

This government looks forward to working with communities, clinicians and stakeholders to deliver strengthened governance and better health services for all South Australians.

I commend the bill to members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Health Care Act 2008

4—Amendment of section 5—Principles

This clause amends section 5 of the principal Act to make provision for health services to be provided as part of an integrated system that is inclusive of primary health care networks, Aboriginal and Torres Strait Islander health services and public health services provided in local government, aged care and disability sectors.

5—Amendment of section 7—Chief Executive

This clause amends section 7 of the principal Act to substitute a number of the Chief Executive's functions.

6—Insertion of Part 3

This clause inserts Part 3, which establishes the office of the Mental Health Commissioner.

7—Insertion of Part 4A

This clause inserts Part 4A, which establishes a requirement for each incorporated hospital and SAAS to enter into a service agreement with the Chief Executive in relation to the provision of health services.

Part 4A—Service agreements

28A—Preliminary

28B—Service agreement with Chief Executive

28C—General provisions about service agreements

8—Amendment of section 29—Incorporation

This clause inserts proposed subsection (7) and (8) into section 29 of the principal Act to enable the Minister to transfer an asset, right or liability acquired by the Minister under subsection (6) of the principal Act to any of the entities listed in inserted subsection (7)(a) to (d).

9—Amendment of section 33—Governance and management arrangements

This clause amends section 33 of the principal Act (as inserted by the Health Care (Governance) Amendment Act 2018) to broaden the functions of a governing board of an incorporated hospital.

10—Amendment of section 33A—Engagement strategies

This clause amends section 33A of the principal Act (as inserted by the Health Care (Governance) Amendment Act 2018) to provide for 3 yearly reviews of a strategy that the governing board of an incorporated hospital must develop.

11—Amendment of section 33B—Composition of governing boards for incorporated hospitals

This clause amends section 33B of the principal Act (as inserted by the Health Care (Governance) Amendment Act 2018) to alter the cases in which a person is not eligible for appointment to the governing board for an incorporated hospital.

12—Amendment of section 33E—Chief executive officer for incorporated hospital

This clause amends section 33E (as inserted by the Health Care (Governance) Amendment Act 2018) to provide that the governing board of an incorporated hospital cannot give a direction concerning the clinical treatment of a particular person.

13—Amendment of section 34—Employed staff

This clause inserts subsection (8a) to provide that no direction may be given by the governing board of the incorporated hospital to the chief executive officer relating to the appointment, transfer, remuneration, discipline or termination of a particular person if the CEO of an incorporated hospital is designated as an employing authority or a power or function of an employing authority is delegated to the CEO of an incorporated hospital.

14—Amendment of section 50—Management arrangements

This clause amends section 50(4) to provide that the CE cannot give a direction concerning the clinical treatment of a particular person.

15—Amendment of section 78—Testamentary gifts and trusts

This clause amends section 78 in relation to preserving the intention of testators in respect of the distribution of testamentary gifts to prescribed entities that have been dissolved.

16—Amendment of section 93—Confidentiality

This clause amends section 93 to make it clear that any obligation about confidentiality does not prevent a person from disclosing information in connection with the management or administration of the Department as well as a hospital or SAAS.

17—Repeal of section 101

This clause deletes section 101.

18—Amendment of Schedule 3—Governing boards for incorporated hospitals

This clause amends Schedule 3 of the principal Act (as inserted by the Health Care (Governance) Amendment Act 2018) to make changes to provisions concerning the governing boards for incorporated hospitals.

19—Insertion of Schedule 3A

This clause inserts Schedule 3A, which provides for the dissolution of the Health Advisory Councils listed in Schedule 3A, clause 2.

Schedule 3A—Dissolution of Health Advisory Councils

20—Amendment of Schedule 4—Transitional provisions

This clause amends Schedule 4 to dissolve the HPC and to provide for any related transitional arrangements on the dissolution of the HPC.

41A—Health Performance Council dissolution

Schedule 1—Related amendments to Mental Health Act 2009

1—Amendment of section 106—Confidentiality and disclosure of information

This clause makes related amendments to the confidentiality provision of the Mental Health Act 2009.

Mr PICTON (Kaurna) (12:12): I rise as the lead speaker for the opposition in relation to the Health Care (Governance) (No 2) Amendment Bill 2019. The Liberal Party did not have much of a plan for health when they came to office, but one element that they did promise was to set up boards. That was pretty much the—

Ms Cook: The Back to the Future plan.

Mr PICTON: That is right. As the member for Hurtle Vale says, it was the Back to the Future plan for the health system. It was about the long and the short of their proposals in the healthcare system. As members would know, and as the member for Hurtle Vale alluded to, we have had boards in South Australia for a great deal of time. Each hospital used to have a board that provided oversight. We then had a health commission, then, obviously, the health minister. Then, during the Brown and Olsen governments, regional health boards were put in place over the top of those country hospitals.

We had local hospital boards, we had regional hospital boards and then we had a central health department and health minister. Didn't that work an absolute treat? No-one knew who was running things. It was a complete circus. We took quite a lot of action to try to reform the governance arrangements for the healthcare system during our last time in government. We introduced this act that is being amended, the Health Care Act 2008, following a very lengthy period of consultation regarding how our healthcare services should be organised in South Australia.

The focus really was on making sure that we had an integrated healthcare system, that we had the appropriate checks and balances and that we had a healthcare system that was accountable to the parliament as well, where the health minister is ultimately responsible for the delivery, via the chief executive, of health services across the state.

The Liberal Party's proposal is to rip that up and put in place boards, except they are not ripping up the entire system; they are creating this sort of hybrid model where boards are responsible for some things but the chief executive is responsible for some things. In many ways, being on one of these health boards is going to be quite an unenviable position because you do not set your budget, you do not set your staffing, you have to be lumped with whatever the Treasurer sets for you, you do not set your performance targets, you do not set your enterprise bargaining arrangements and you do not set your performance agreement.

Really, you are supposedly responsible for the delivery of health services in your area, but everything is tied up for you. When things go wrong, you will be to blame, but you do not actually have the power to address any of the fundamental causes that are leading to that. If the issue is that there is not enough funding going to a particular service, you do not have the power to do anything about that. If the issue is something to do with the staffing arrangements, the boards are specifically precluded from having anything to do with staffing arrangements except for one person, the chief executive, and these boards are completely subject to the directions of the Chief Executive of SA Health. It is sort of the Clayton's version of having health boards in South Australia that the government is setting up.

You might think, 'This will be a cheap sort of affair,' but, no, this is still a very expensive proposition. The government did not talk about the cost of doing this when they promised it. No costing was attached to it back then, but now we know what the cost is going to be because the government has had to outline that in their budget. The cost is some $15 million over four years. In this year, 2018-19, $2.3 million is going to this, then it rises to $3.6 million every year. That is not paying for extra doctors, it is not paying for extra nurses and it is not paying for extra surgery operations. This is paying directors' fees and bureaucrats. An extra level of bureaucracy throughout the health system is what this government is paying for.

People thought that they were electing a government that was going to invest more into health, but here we see more being invested into bureaucracy and directors' fees. Imagine what you could do with that $15 million spent elsewhere in the system.

Ms Cook: Gayle's Law.

Mr PICTON: That is right. The member for Hurtle Vale recollects our discussion this morning about Gayle's Law and remote area nursing. Imagine what $15 million could do in the remote areas of our state to improve health care for people in those areas.

This is a very expensive proposition. That $15 million only accounts for some of the bureaucrats and the directors' fees. We know that this is leading to a massive duplication of staff that is happening right now because these health board arrangements were implemented at the start of this week. They came in from 1 July. What the government is proposing in this bill is not to set up health boards because they are now in place. This is their 'fix things up' bill because they did not get things right the first time. They are trying to rush this through the parliament to fix up what they think were their mistakes the first time.

We have these health boards running at the moment, but the government has decided it did not actually like the legislation it passed only a few months ago; hence, this is the No. 2 bill to go around and try to address all the issues that they did not think of or they stuffed up the first time. We know that one of the reasons for that was that the government basically did zero consultation on their first bill. They did not talk to key stakeholders, they did not talk to clinicians, they did not talk to people affected in the health system and they did not talk to health experts. In fact, the first time that many key organisations heard about the legislation from the health minister was when I sent it to them.

An honourable member: Oops!

Mr PICTON: Oops! I sent it out saying, 'This legislation has been introduced into the parliament. I am seeking your feedback on the government's bill.' When you do that, you usually expect that those organisations have been involved in the process, understand what will be in it and could probably copy and paste exactly what they have already sent to the government as part of the consultation process. But that did not happen in this case because the government did not talk to any of those organisations before they introduced the legislation. I seem to recall that this was part of their 100-day plan, the ill-fated 100-day plan with so many broken promises as part of it.

So they rushed this bill in to the parliament to meet that 100-day plan but they did not actually consult with people in the lead-up to it. They did not understand the implications of it and they are trying now to fix things up here. When we were talking to the government, when that bill was first being debated, so many things were being said such as, 'We do not need to worry about that now. This is just phase 1. That is a phase 2 issue. Don't worry about that until phase 2.' So even some very important conceptual issues about where organisations were going to fit, who they would be responsible to, how lines of responsibility would fit across the health system were all phase 2.

Now that we have this phase 2 piece of legislation, there are still so many questions open that the government is saying, 'These are phase 3 issues. We will work these out later. We will put these out down the track.' The truth of the matter is that the government is really playing catch-up with how this is actually going to work. They do not really understand how this is going to work. It is going to be a muddle for the health system for some time. It is going to be enormously disruptive.

Nowhere is this going to be more disruptive than in country South Australia. Country South Australia, for over the past 10 years, has been working together as one country health system. We have had local representation of people through health advisory councils. They have been advocating for people at their local level. But we have had a central approach to make sure that key aspects such as the safety and quality of care, financial controls, contracting controls, procurement controls and service planning will make sure that those country hospitals get the support they need to do all those things.

What we are seeing now is that this is all being split up. The government has drawn some lines on the maps and said, 'We are going to split up country South Australia into six boxes.' These six boxes will all operate supposedly independently. They will all have supposedly independent control of their health services. That is, except for a few things. One is they do not have any local ability to do that work. They have not given those boards and those new health services any extra resources to do that.

Only recently, I was speaking to a senior health official in one of those local health networks who was saying, 'This is a complete mess because we have been given all this extra work to do. We have no extra staff to do it, with no extra support to do it, but now we are responsible for a whole range of other things when we actually want to get on with the care of patients, which is what we are there to do.' But now all this extra bureaucracy is landing on their shoulders.

At the same time, the government says, 'We are decentralising everything. Everything is going to be great because everything is going to go out to the communities and the communities are going to run their health services.' But what they have not been so keen to promote is the fact that not mentioned anywhere in this legislation is that they are setting up this bizarre body called a rural support service.

This rural support service is quite interesting because it is going to sit under the auspices of the Barossa Hills Fleurieu Local Health Network and it is going to encompass some 219 bureaucrats, who left work on Friday working for Country Health SA in an office tower in the city, and when they went to work on Monday they were working for the rural support service. They have pretty much just changed the badge.

There is no devolution of those staff out to the communities. They are still operating in a centralised way, but the legal responsibility is being decentralised out to those communities. Those 219 people are in the city. We asked the minister about this the other day and he said, 'No, this rural support service is going to be headquartered in Nuriootpa.' We asked how many staff will be working in the Nuriootpa headquarters of the rural support service, and he could not answer that. He did not know that. I suspect that maybe 218 out of those 219 staff are working in the Adelaide CBD, and none of them have been forced to move to Nuriootpa or anywhere else in South Australia.

Earlier this week, I sent a request to the minister to visit the supposed headquarters of the rural support service at Nuriootpa. If it has 200 people working there, it must be one of the largest employers in the town. It would be a very big boost to the employment of Nuriootpa to have an extra 200 staff working there. I would imagine there must be a multistorey office building that has been built in Nuriootpa to contain these hundreds of staff who are working there, providing these centralised services for country South Australians.

You will be shocked to know that we have not had a response. There is no response yet to my request to visit there, which is pretty standard practice from the health minister, the Hon. Stephen Wade, who takes his good time to respond to requests from the opposition to visit health sites or to get briefings. Coming up, I am visiting the Murray Bridge hospital in the member for Hammond's electorate, which I requested to visit about six months ago.

That is the length of time and planning that we need to go through the bureaucratic rigmarole from the opposition to be able to visit and speak with country health sites. Obviously, I cannot just go there. There are protocols that the minister has in place to ensure that I cannot go there without his permission, so we need to go through this bureaucratic rigmarole through his office to get that.

Basically, we have this con being perpetuated on the people of country South Australia where the government is saying, 'We are devolving things to you. Everything is going to be great, except all those central staff are all staying central in Adelaide, and we are also going to give the staff who are in those country locations more work and more responsibility with no extra resources.' Then, at the same time, we find out in the state budget that those same health services, that have now been split up into six for the first time, are having their staff reduced. Over two dozen staff across country locations in the state budget are to go. They have extra work to do, but they are going to have fewer staff to do it.

The minister is saying they are not targets: they are estimates. What a strawman argument. Yes, they are estimates. They are estimates of what you are saying you are going to reduce the staff by. They are what you have estimated you are going to reduce the staff by this year.

Ms Cook: Estimated targets.

Mr PICTON: Estimated targets. They have estimated across SA Health that they are going to reduce the staff by 1,140, which is massive. This would be the biggest reduction in health staff in the history of our state. At a time when we know the massive pressure that is on our hospitals, taking out that many health staff is incredible. They have to do this if they are going to meet the substantial projections for their budget savings targets that are baked into the budget over the next three years. They are basically suggesting in their budget that they are not going to increase health spending over the next three years. They are going to freeze health spending for three years even though we know the demand, the price, and the pressure on health services is going up and up and up. There will be no extra money to deal with that.

In real terms, it is going to be a significant cut. In health, two-thirds of every dollar that you spend in the health system goes on the health staff, so you cannot make significant cuts to the health budget without cutting staff in the health portfolio. That is why they have had to estimate that they are going to reduce 1,100 staff this year. That is an outrageous estimate and it shows how much worse things potentially could be over the next short while in this health system.

There are a few good things that have been put into this bill that were not there before, and there are a few bad things that were in it that have been taken out. For that, we have to say thank you to our colleagues in the other place. It will be interesting to see what the government's approach to that is. I understand that they have filed, so far, no amendments to this legislation, but it will be interesting to see whether they sneak some in at the last minute.

There are some very important things in this legislation now, first and foremost of which is to protect the position of the Mental Health Commissioner of South Australia, a position that we established a few years ago. This was a position that we committed to and established when we were in government. We appointed Chris Burns, who has done an incredible job and has been highly respected by the community. You cannot speak to anybody in mental health who has anything bad to say about him. In fact, I was delighted to attend a recent function hosted by the Mental Health Commissioner with people in the sports arena.

The issue of mental health in sports and recreation is an emerging issue. The Mental Health Commissioner worked with Sports SA to bring together a whole range of stakeholders and experts to look at how to improve things. I was there, the member for Reynell was there and the member for Waite was also there, and he gave what I thought was a really good speech in which he endorsed the Mental Health Commissioner of South Australia, Chris Burns, and the excellent work that he is doing.

Sadly, the health minister was not listening to that great contribution from the member for Waite. It pains me when people do not listen to the member for Waite's contributions. Sadly, the health minister was not listening because only a few days after the speech by the member for Waite, endorsing Chris Burns' role as the Mental Health Commissioner, the health minister basically put Chris Burns on the chopping block.

Ms Cook: He got the scissors out.

Mr PICTON: He got the scissors out. What the government is proposing to do with the Mental Health Commissioner is to reopen the position. So Chris Burns is out—just as we have seen with other positions under this government, such as the victims' rights commissioner, Michael O'Connell. Do you remember what happened to him?

Ms Cook: Yes—scissors.

Mr PICTON: Yes—out. The DPP, similar—out. We are now seeing that happen to the Mental Health Commissioner as well. The position will be reopened for whoever the Liberal Party deems appropriate for that position.

The Mental Health Commission was established as an independent office and was one of the executive service appointments of the government. It is one of the top bureaucrats of the government who has a contract with the Premier. It was established with its own office, its own resources and its own ability to work independently of the health department. What this minister is proposing to do now is gut the commission. He is proposing to keep a commissioner, but not this commissioner, but stick them inside the health department.

The government is proposing, as part of their changes, to corral together a whole bunch of bureaucrats, who have been doing a whole bunch of work on programs for many years, and give them a new name. They are going to call these bureaucrats Wellbeing SA. There is not going to be any extra money going in there. It is just going to be the same bureaucrats doing the same things under a different name. They are now going to stick the Mental Health Commissioner and his budget into that Wellbeing SA.

There will not be an independent office of the Mental Health Commissioner under the minister's proposal. There will not be independent staff for the Mental Health Commissioner to undertake the valuable work that he has been doing. There will not be independence for him at that higher level of the Public Service anymore. Whoever will be appointed by the Liberal Party to replace him, after they get rid of him, will be just stuck in the department and subject to departmental instructions.

What we propose, and what the other place has seen fit to include in this legislation, is to enshrine the Mental Health Commissioner in legislation as a statutory appointment, with statutory roles and independence and a report to parliament. I think that is a very worthy part of this legislation. I hope the government does not seek to withdraw that part of the legislation through last-minute amendments they may seek to find. I hope that remains in this legislation after it has left this house. That is going to be very important.

You only have to speak to many stakeholders in mental health, you only have to speak to people with lived experience of mental health conditions, to know the dramatic importance of this position and the huge amount of work that Chris Burns and his team have been doing since they were appointed. So that is really important.

How did this all come about, where the government decided to gut this position? They secretly established a review of mental health governance in South Australia. They did not tell anybody they were doing this. They did not announce they were doing it. They appointed a Victorian firm to do this work and they only released the report months after they received it. Very interestingly, the report outlined who the government consulted with as part of this. They had consulted with no outside stakeholders whatsoever. Everybody in South Australia they consulted with was in the health department or within the government of South Australia. That is hardly a consultation at all.

If I were conducting a consultation by talking to just the member for Hurtle Vale and the member for Enfield I could rightly be criticised that that was not a broad consultation, even though I am sure they would have very worthy views—

Ms Cook interjecting:

Mr PICTON: —very effective views to add. This was the worst possible example of consultation.

Then the government doubled-down on it. They said, 'We're releasing this report. We are releasing our response to this report endorsing the recommendations, but now were going to have some consultation publicly.' They held what is now being talked about—and what I am sure will be talked about for many years—as one of the worst consultation exercises that has ever happened in this state.

They brought together all these people who were very angered by what had happened, and I understand that the department deputy chief executive, who was in charge of this, came to give a short presentation to say, 'Well, this is what's happening.' Then he left. He was not actually interested in hearing what people had to say about the proposal and not actually interested in discussing it with them or exchanging views about it. He just wanted to say what was happening and then leave. That is not a consultation at all, and it has been significantly criticised by everybody who works in this space in South Australia because of how poor it was.

So here is a chance in this legislation, even though it is a relatively poor piece of legislation and a poor proposal. There is one good element here, and that is to establish the Mental Health Commissioner as a statutory body. I hope it stays in the legislation, I hope that is a way in which this legislation can be improved.

I mentioned before that there were some bad things in this legislation that were taken out by the other place. Again, it will be interesting to see whether the government defies what the other place has said and tries to reintroduce those things. First and foremost of those was that in the Health Care Act 2008 one of the central elements was to establish the Health Performance Council. The Health Performance Council is to sit atop the entire health system in South Australia; not just running hospitals, not just running state services, but to look at how healthy is our population, to look at are we doing everything we possibly can in Aboriginal health. Are we doing everything we possibly can for chronic disease management? Are we learning everything we possibly can from evidence from around the world?

An independent body providing advice to both the minister and the parliament, looking at our biggest area of expenditure in the state budget, there was no mention before the election that the Liberal Party proposed to abolish the Health Performance Council. There was absolutely no mention of that whatsoever. Also, there was no mention of that in the first bill we had months ago. There was no mention of that whatsoever. It has only come to this second bill, where they have tried to abolish the Health Performance Council and not have that independent oversight, not have that reporting to parliament anymore.

The government's line is, 'We don't need this anymore because we are going to have these boards and we're going to have the commission on'—I forget if it is the innovation and excellence or excellence and innovation, but we are going to have this commission. Well, this commission does not appear anywhere in this legislation. This commission is a commission in name only. It is basically going to be an office in the department because it is not going to have any independence and it is not going to have any ability to report to the parliament independently. It is going to be at the whim of the health department, and it is not going to have any transparency about what it is going to be doing.

I am yet to meet anybody who understands exactly what the commission for excellence and innovation or innovation and excellence is going to be doing. I have spoken to a number of people who are very concerned about it in the name of—well, this just looks like it is going to be a new version of a clinical centre; whereas in health I think it is important that we listen to doctors but that we also listen to a whole range of other health practitioners. There were a number of speeches yesterday in this house about nurses and the great role they play in our health system. They are, of course, the largest workforce we have in health—

Ms Cook: Huge—30,000.

Mr PICTON: —30,000 the member for Hurtle Vale says—and we need to be listening to them, too. We need to be listening to experts as well. This needs to be a very broad commission, but there is no idea, there is no proposal, there is no outline for the parliament, of how this is going to work because they are not proposing to put it in legislation at all. It is just going to sit in the department with no independence.

The government proposed to the parliament, 'We are going to take away this independent body that provides advice to you, to the parliament and to the people of South Australia. We are going to replace it with this body, but we're not really sure what it's going to do. We can't really tell you anything about it, and it's not going to have independence and it's not going to report to you.' Quite rightly, the upper house, the other place, rejected that proposal, rejected the proposal of abolishing such a body, and amended the bill to take out those provisions. I hope that the Minister for Energy and Mining will not be reintroducing those provisions because I think that is the wrong move. I suspect that the other place will insist upon its amendments and that the government will further delay the passage of their legislation.

One of the other very significant things in this legislation is that the government is seeking to wind back what the minister himself had put in the legislation in terms of conflict of interest provisions. Even though, as I said, this is the Clayton's version of having boards, various health boards will still be signing contracts under this legislation. If you look at the city boards, for example, they will be signing contracts worth many, many millions of dollars. The budget for the Central Adelaide Local Health Network is some $2.2 billion or $2.3 billion of expenditure.

This is big money we are talking about. These boards will, technically at least, have control over more health expenditure than any other boards of any kind in the state government, let alone that most departments would love to have as much money as the Central Adelaide Local Health Network. We need to be absolutely robustly sure that we have provisions in place that protect taxpayers in terms of how those boards operate and the people who are on them and declaring any potential conflicts of interest that might arise.

When the first bill came through the parliament, the Hon. Kyam Maher, from the other place, and I proposed a series of amendments to try to improve that act and to try to make sure that we could have better disclosure of interests. We looked at what happens in parliament, what happens in local government and we proposed: why should the Central Adelaide Local Health Network board, with billions of dollars of expenditure, have less disclosure requirements than the Walkerville council, the City of Adelaide or the Onkaparinga council?

Why should councils with vastly less expenditure have less disclosure requirements? We were not successful in our pursuit of that because the minister himself brought in his own suggestions, his own requirements, to improve the bill and to undertake a better disclosure regime. Ultimately, his amendments were successful and they were incorporated into the legislation. Somewhere between that first bill passing and this second bill coming to the other place and now this place, the government has had an about face on the minister's own proposals.

The government has decided that they want to wind back the oversight, transparency and protections and make sure that they have less oversight, transparency and protections in place. There are a couple of fundamental ways in which they are doing that. One is about the potential conflicts and engagements that a person might have between their role on a board and other pursuits that they have.

I understand that in some ways this can be a difficult issue because you do want to make sure that people who might have a very tangential connection to health services are not precluded from being on the board. But, at the same time, what the government is proposing is that you could be on the board of a private pathology company and on the board of the Central Adelaide Local Health Network, which, as the government has foreshadowed, may well soon be embarking upon a privatisation of that pathology.

How can that work? How is that good value for taxpayers? How is that providing us with the level of protection that we need in terms of people's interests? It does not. It is ludicrous. Already the government foreshadowed in one of our briefings that they think one board member has already fallen foul of this. I think an important question is: did the government remove that board member before the original legislation, with the original protections that the minister put in place, came into being on 1 July, or is that board member sitting on a board in breach of the legislation, in breach of the law of this state? That is a very interesting question that we will be examining when we get to the committee stage.

The other particular issue the government has been seeking to change is about the disclosure of conflicts of interest. Under the minister's proposal, which we got him to the first time around, if you had a conflict of interest you would declare it on a register and you would declare in the minutes of a meeting where that conflict had arisen. That seems very sensible; that seems entirely appropriate, particularly when we are dealing with billions of dollars of health expenditure.

What the government is seeking to do now is remove the second arm of that. The government is seeking to say: 'You should only have to declare your conflicts of interest in a central register. You should not have to declare those conflicts of interest in the minutes of the meeting.' For instance, the Central Adelaide Local Health Network starts a discussion about the privatisation of SA Pathology, which supposedly falls within its gamut and, for example, there is a board member on that board who owns shares in a pathology company.

I think it would be appropriate that that should be disclosed in the minutes so we can see the clear connection between that shareholding and the item that was discussed because that is not always going to be apparent. It might not be apparent in terms of the employment arrangements or the shareholdings or the interest that a person has just by looking at the register to see where those issues have arisen in the meetings and to see how they have been dealt with and appropriately looked after to make sure that taxpayers are protected in those meetings.

I have a very strong view that this needs to be altered. If the minister's proposal prevails on this, it is a real step backwards for the disclosure of conflicts of interest. I think what is being proposed defies common sense. These are public dollars. These are public institutions. This is not a private business and the public have a right to know, when those conflicts arose, why people were conflicted and what was done about them in terms of the management of that at the board level.

It is absolutely important that that disclosure takes place, and we know it is important because the minister himself said it was important by putting it in the original piece of legislation. So why has he now proposed pulling that out of the legislation and walking backwards from his own protections that he sought to put in place? We wanted to go even further than he was, but now he is walking back from the original protections that he himself proposed.

I think that when you look at our health system at the moment there are some significant concerns around how it is being managed in terms of conflicts and in terms of business arrangements, and you have to look no further than what is going on with corporate liquidators at the Central Adelaide Local Health Network. This is a really unprecedented move by the government.

We now know the full history of this. KordaMentha originally did a project for the government for which they did not have to go to public tender. They did not have to do any negotiations with any other bodies. The government did not ask anybody else for a quote on this work. They just went to KordaMentha and said, 'Can you do this work for us for $1 million?' That appears to be a clear breach of the State Procurement Board guidelines—a clear breach. Anything of that magnitude of money should be going to a competitive process because this is taxpayers' money that we are talking about.

Lo and behold, who would have thought that, following KordaMentha's original report, they would have said, 'What you really need to do, government, is appoint some outside financial experts who can come in and administer the place.' The government said, 'That's a good idea,' and then KordaMentha said, 'We are the people who can do that work for you.' Lo and behold, when that work went to tender, KordaMentha were in the box seat to win that work.

Ms Cook: Bingo!

Mr PICTON: Bingo, as the member for Hurtle Vale says. This project so far has cost taxpayers over $23 million, which is a massive amount of money. We have the $15 million that is being spent on board members. We have the $23 million that is being spent on KordaMentha, and that only takes us up to a few months' time. After that, if this contract continues, then it looks likely that the scales could tip somewhere between $40 million and $50 million going to this firm.

Let's run through this. This firm has no prior experience in running hospitals. They have never done that. They have no-one in Adelaide. I think they might have just hired one person, but their entire team is a fly-in fly-out team from Melbourne and Sydney. The only economic benefit that South Australia is getting out of this is taxis and hotel rooms because all of that money is going interstate.

The South Australian Industry Participation Policy guidelines set such high criteria in tender assessments for local procurement, so it is astonishing that this proposal, which had zero local procurement, got through that process and apparently the contract was awarded. That is very peculiar to me and I think it is worthy of much more investigation.

All this money is going interstate. They have no health experience, but these people have now been appointed. In an unprecedented way, we have now appointed two external consultants to be executive employees of the South Australian Public Service while they continue their role at KordaMentha interstate as corporate liquidators. These people are sometimes wearing their hats as public servants and sometimes wearing their hats as KordaMentha external corporate liquidator consultants. This is a very fishy set of arrangements.

Mr TEAGUE: Point of order, Mr Deputy Speaker: I have been following the debate. I am always interested when the opposition chooses to engage in the health space after recent years, but straying from—

Members interjecting:

The DEPUTY SPEAKER: Order! Member for Kaurna, could you take your seat, please. The member for Heysen has raised a point of order. Could you identify your point of order, please?

Mr TEAGUE: It is relevance, Mr Deputy Speaker. I am reading along in the bill. The member for Kaurna has now strayed for some time into subject matter that is loosely connected to the clean-up we are engaging in in the health space, but it is not any longer—

The DEPUTY SPEAKER: Thank you, member for Heysen, for your spontaneous speech regarding relevance. I will listen carefully. The member for Kaurna is the lead speaker for the opposition on this, so obviously I will listen carefully. It is important that we keep to topic. As far as I can tell, he has been pertaining to health thus far, but I will listen carefully.

Mr PICTON: Thank you very much, Deputy Speaker, for your protection against that ridiculous speech from the member for Heysen.

The DEPUTY SPEAKER: Member for Kaurna, you are now called to order.

Mr PICTON: This is all about the governance of health in our state. The member for Heysen does not think that bringing in corporate liquidators to run our hospitals has anything to do with health governance. It has everything to do with health governance, absolutely everything. It goes to how this government propose to run the health system, who they are bringing in to do it, how they are doing it and what potentially could happen under this legislation. It is absolutely connected. I remember many speeches by those opposite about cows when we were talking about Corrections bills. I think that, in this regard, this is very deeply connected.

When we look at this KordaMentha administration, I think it raises very significant issues about the interaction between private management and private consultancy and what should be the administration of public health services that should be in public hands. The chief executive officer, who has particular powers in this legislation, has signed on these corporate liquidators to be administrators in the health system at the same time that they hold these external positions, at the same time that they are the vast beneficiaries of this significant contract that the government has entered into.

This contract is massive; some $23 million has been spent so far. The fees that people are being paid daily out of this are astronomical. Almost any South Australian worker would never dream of being paid some $700 or $800 per day to work on a contract. It is just astronomical what these people are being paid. At the same time, the government say, 'We need these people to save this money in the health system.' Well, the evidence is in from the first year and it is not looking good. Last year, what did the health system save? Not much. What did it cost? It has blown the budget by $258 million in the last year. That is the evidence so far of what KordaMentha has been doing.

Members interjecting:

Mr PICTON: That's right. The minister for flogging off trains over there is laughing that the health system has spent $258 million. Maybe if that had not happened, he would not have to flog off railways.

The Hon. S.K. Knoll interjecting:

The DEPUTY SPEAKER: Order, minister! Member for Kaurna, this might be an opportune time to seek leave.

Mr PICTON: I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 12:59 to 14:00.